You call it rationalisarion I call it diluting the core of the game in Sydney. Melbourne have 10 top flight AFL clubs with 1million less people than Sydney which has 8.5 top flight NRL clubs. One code seems to be going ahead and the other keeps regressing? Go figure. If I were the NRL I would show the same intent as the AFL in junior development. Thats progress. Please note that the AFL has universal presence in both public and private schooling. This is not the case for rugby league. As rugby league dismantles itself(courtesy of superleague logic) more neutral fans see a weakness and go elsewhere for their 'footy' fix.
The AFL is in the exact same hole as the NRL in this regard, they're just able to plaster over it more easily because of their average attendance in Melbourne, and the fact that they don't have as many options for expansion as the NRL does.
They have the exact same problems with having to carry smaller clubs in Melbourne and it holding back the growth of the sport, competition for sponsorship, etc, in fact they have been pressuring smaller clubs (Demons, Kangaroos, Bulldogs, etc) to relocate for decades now, they just don't have the balls to force the issue at the moment.
Also you assert that the "core of the game" is in Sydney and that it must be protected, but why should the game in Sydney be preserved at the expense of the game in other regions?
Why does a place that has the most access to top flight RL content, and has the most money poured into it's grassroots, of anywhere in the world need even more help at the expense of places that literally have little to no access to top flight RL at all and run their grassroots on the smell of an oily rag.
If you want to see a place where RL is struggling then come down to Canberra, a place where we have to deal with corrupt politicians in bed with the AFL eroding our sport in the most clandestine of ways on one side and the private school's old boys club and the most successful RU club in the country eroding it on the other, while the NRL stands by and watches it happen and does nothing to help because they are too busy appeasing the Sydney clubs, the Broncos, and their News Limited overlords!
Then once you've seen RL struggling in Canberra go out into the bush, somewhere like Wagga, Tamworth, Junee, etc, and see whats left of the sport out there, not a lot is the answer because they simply get next to zero support.
Then once you're done in country NSW go out to SA, WA, Victoria, etc, and have a look at the absolute wastelands that they are for the sport because they get even less support.
Then once you've done all that tell me that Sydney needs more support and can't afford to give a little back to the game.
P&R for Sydney exclusively. This would actually be brilliant for the game...
It protects the vital markets across the regions/interstate, and travel costs in the lower grade would be nothing (the longest trip for this second division would be Manly to Campbeltown).
Get some fear back in fans that (if you dont turn up, your team might not be here next year) and it gets some excitement back in the game (the closed shop we have is f*cking dull).
And, if a team want to protect it place in the NRL, all they need to do is relocate to a city outside of the Sydney division area.
What no it wouldn't, it's a bloody stupid idea.
It doesn't fix the main problem that over saturation causes, to much competition for resources to support the amount of clubs in the region!
If anything it'd compound the problem by adding even more competition for local sponsors, corporate dollars, fans, FTA time, etc, in fact I think it'd be fair to say that it'd force the Sydney clubs to cannibalise each other even more and completely neuter the clubs in Sydney commercially over time.